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California Loan Modification Bill - Is it Helpful?

California Loan Modification Bill - Is it Helpful?

California - In the modern and cruel world today, one can never really put so much trust on a person especially when it involves money and business. Today scammers and swindlers are at every corner of business transaction may it be in buy and selling trade, insurance, education plans and loans. Scammers victimize unsuspecting clients especially in urgent transactions, such as loan modification. When it comes to loan modification, California is one of the states that implement strict bills and laws to protect its people from scams and frauds. The state officials passed Senate Bill 94, proposed by Senator Ron S. Calderon (D-Montebello) Chairman of Banking, Finance and Insurance to protect California home owners from scams among loan modification companies. Despite the good intentions behind the conception of the bill, some homeowners and private housing sectors are raising their eyebrow.

Winning a vote of 21 to 14, on May 21, 2009, Senate Bull 94 was passed in the senate and it is awaiting referral to a committee. The Senate Bill 94 states that:

"It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge."

However, home owners and private housing sectors are seeing loopholes in the Bill. According to them, it missed the fact that there are private companies with good reputation that can serve as middle men between home owners and lending institutions in processing mortgage restructuring transactions. Many of these private companies have successfully helped many Californian homeowners, especially those private sectors licensed by the state's Department of Real Estate and/or Law firms. Now that foreclosures cases have been continually increasing every month, one can clearly see that Californian homeowners will not benefit from any legitimate avenue being unjustly maligned or overlooked.

Many are asking if the Bill will be beneficial to home owners in the brink of losing their homes? Others are saying that although the Bill was supposed to protect homeowners, it was poorly researched. It did not have any accurate data on the contribution of the legitimate loan modification deals in California. So many are asking: "How can a senate bill written without the knowledge of how many homeowners were saved by private sector mortgage restructuring firms monthly help the homeowners?" According to those who are against the Senate Bill, the newly passed bill did not have the data on the sustainability of modifications obtained by private sectors when it was written. If a proposal plan was meant to help or improve something in the future, the first step is always to study the present situation of the subject before devising a plan of improving it. How can a solution be a solution if it does not have the full knowledge of the subject and the problem it was meant to solve?

Many Californians have been victimized by scammers; however this Senate Bill seems to be ineffective in solving the present dilemma of millions of homeowners in the state. Sadly, the Bill leaves a question: "How can this Senate Bill 94 ward off scammers?"

The Loan Modification Bill may still need some adjustments to truly help protect the rights of homeowners in California. In the mean time Californians should be more cautious with who to ask for help about their mortgage transactions.